Gold Loses Early Gains Amid New Trade Worries, Recovery In USDX

(Kitco News) - Gold prices are modestly down in early-afternoon trading, on some fresh concerns regarding the U.S.-China trade war and a bounce in the U.S. dollar index up from its daily low. December gold futures were last down $2.40 an ounce at $1,208.50.December Comex silver was last down $0.048 at $14.24 an ounce.

Gold prices dropped from moderate early gains in late-morning dealings following a tweet from President Trump that appeared to downplay any progress made on the U.S.-China trade dispute front. Gold saw some buying strength on Wednesday on reports the U.S. made an overture to China to restart the stalled trade talks between the world's two largest economies. It can be extrapolated that a U.S.-China trade agreement would be a benefit for precious metals markets due to more demand coming from China because of its better economic strength garnered from a trade agreement.

Gold prices had seen gains in the wake of some morning U.S. economic data. The August consumer price index came in at up 0.2% versus expectations of up 0.3% from July. The producer price index on Wednesday also came in lower than expected. The U.S. dollar index was pressured by the latest inflation report.

Today the European Central Bank met and left its monetary policy unchanged. The Bank of England also held its regular monetary policy meeting Thursday, and also left interest rates unchanged.

Reports said the Turkish central bank raised its key interest rate by a whopping 6.25% today, in an effort to prop up its eroding currency, the lira. Traders and investors should continue to keep a close eye on the world’s secondary currency markets.

World stock markets were mixed to mostly higher overnight. U.S. stock indexes are higher in midday trading and not far below record highs. The marketplace sees trader and investor attitudes remaining generally upbeat. That’s bearish for the safe-haven metals.

The other key outside market today finds Nymex crude oil prices solidly lower on profit taking and trading around $68.50 a barrel.

Technically, December gold futures bears still have the overall near-term technical advantage. However, prices are in a fledgling four-week-old uptrend on the daily bar chart. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,220.70. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the August low of $1,167.10. First resistance is seen at today’s high of $1,218.00 and then at $1,220.70. First support is seen at $1,200.00 and then at this week’s low of $1,192.70. Wyckoff's Market Rating: 3.0

December silver futures bears have the solid overall near-term technical advantage. There are no early clues to suggest a market bottom is close at hand. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $15.07 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $13.50. First resistance is seen at $14.405 and then at $14.59. Next support is seen at this week’s low of $13.965 and then at $13.75. Wyckoff's Market Rating: 1.5.

December N.Y. copper closed up 85 points at 268.45 cents today. Prices closed nearer the session low today and saw more short covering. The copper bears still have the firm overall near-term technical advantage. However, more good gains on Friday would begin to suggest a market bottom is in place. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the August high of 283.80 cents. The next downside price objective for the bears is closing prices below solid technical support at the August low of 257.45 cents. First resistance is seen at today’s high of 271.75 cents and then at 274.00 cents. First support is seen at 265.00 cents and then at 262.50 cents. Wyckoff's Market Rating: 2.0.